Oil dives three percent

Oil slid 3 percent on Thursday, making its steepest three-day decline since mid-May after an unexpected rise in US jobless claims further stoked fears that a hoped-for economic recovery was unravelling. Prices vacillated with equity markets through much of the session, but ultimately ended near their lows even after equities pared losses, with some bullish investors losing faith in oil's ability to break out of its near year-long $70-85 trading range as the economic outlook darkened and fuel stocks expanded.
US crude for September delivery fell 2.9 percent or $2.28, to settle at $75.74 a barrel, the lowest in a month. Prices hit session low of $75.52, the lowest since July 19, taking three-day losses to 7 percent. Trade was active, with over 800,000 lots on NYMEX crude futures for a second day running, the most in two months.
Brent crude ended down $2.12 at $75.52. Oil deepened earlier losses in tandem with falling stocks and a rising dollar after data showed that people filing new claims for unemployment benefits in the United States unexpectedly rose in the latest week to its highest level in close to six months.
Investors fled oil and other risk markets, shifting funds to the dollar and gold futures as they bet on safer assets. Gold rose by 1.5 percent, its biggest gain in over two months, while the US dollar index climbed 0.34 percent, pausing after the previous day's surge.
"Institutional type long positions continued to be unwound today despite a steadier tone to the euro and some deceleration in this week's equity decline," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois. Oil inventory data this week also fed fears about the state of consumption in the world's biggest consumer, with a bigger than expected counter-seasonal rise in gasoline stockpiles in the midst of the US summer driving season.
However, US gasoline futures outperformed the oil complex on Thursday as traders who sold gasoline and bought crude moved to lock in profits on the crack spread, which dived from over $10 a barrel to a 2010 low under $6 since the start of August. Gasoline stockpiles also increased substantially at Europe's Amsterdam-Rotterdam-Antwerp storage hub over the past week with due to weak demand and overproduction, Dutch oil analyst Pieter Kulsen said on Thursday.
Further adding to concerns, energy data information provider Genscape said on Thursday that crude inventories at the key Cushing, Oklahoma, delivery hub rose 126,077 barrels to 39.89 million barrels in the week to August 10, just shy of a record high 40 million barrels in late July. The International Energy Agency, the adviser to 28 industrialised countries said on Wednesday that oil demand growth next year would be sharply lower if the economy falters, stoking negative sentiment for crude oil.